Should I Buy Johnson and Johnson (JNJ)? Finance YouTuber Analysis

The YouTuber views Johnson & Johnson as a quality stock currently undervalued, despite recent headwinds from asbestos litigation and the patent expiration of Stelara. The stock's current dividend yield of 3.3% is near its all-time high, and the P/E ratio of 15 is below its historical average. The company's strategic focus on pharmaceuticals and medical technology, along with a strong pipeline of new drugs like Darzalex, positions it for future growth, with an estimated 12% annual return over the next 3.5 years.

“Die zweite Aktie ist noch bekannter als Ausm. Das wäre tatsächlich Johnson und Johnson. Ich habe die Johnstone und Johnson auch im Depot und ich muss auch sagen, ich bin nicht so ganz glücklich über die Kursentwicklung der letzten Jahre.”

The analyst suggests Johnson & Johnson is currently undervalued, trading at a P/E of around 14 compared to its historical average of 16.5. The recent spin-off of the consumer health segment, which was low-growth and low-margin, is expected to improve the company's overall profile. Despite a near-term headwind from a patent expiry, the company has a history of overcoming such challenges, making it an attractive dividend payer for long-term investors seeking solid returns.

“Johnson and Johnson für mich also ab zurecht kaufenswert und auch wirklich zurecht auf Platz 1 natürlich nicht für jeden es muss halt jemand sein der ein soliden Dividendenzahler sucht und der mit einer Performance halt zufrieden ist die jetzt nicht an Aktien wiev oder irg sowas anderes rankommt da muss man dann quasi locker drüber stehen”

Johnson & Johnson offers an attractive dividend yield of 3.1% and is considered undervalued despite recent stock performance. The company has spun off its consumer health division (Kenvue) to focus on its more profitable pharmaceutical and medical devices segments, which should improve margins. While legal challenges regarding asbestos claims remain a risk, the stock is near its one-year low, presenting a solid long-term dividend investment.

“wir sind bereits nahe am ein Jahrestief angekommen und noch tiefer hat die Aktie lediglich in den Jahren 2020 und dann hat W des Coron crrash gekostet qualität hat eben seinen Preis”

Johnson & Johnson is considered a solid dividend aristocrat with a secure dividend, especially after spinning off its lower-margin consumer segment. The remaining pharmaceutical business offers better growth and margins. The stock is currently slightly undervalued, presenting a good entry point for a dividend-focused portfolio, with an expected annual return of 8.8% until 2026.

“liebter Basiswert sage ich mal dividendenbasiswert für ein entsprechendes Dividenden Depot wo man bisschen zurückschrauben kann was die wachstumserwartung angeht”

The analyst recommends setting a buy limit for Johnson & Johnson at around $160. The company is praised for its stable growth, high margins, and strong balance sheet, but its current price is considered somewhat expensive, offering only a modest expected return. A lower entry point would yield a more attractive return of around 9.1%.

“grünes licht beim qualitätscheck überall gelbes licht bei fairen wert für einen einmal kauf”

The analyst recommends buying the remaining Johnson & Johnson (Pharma/Medical Devices) after its consumer division spins off. This segment demonstrates strong growth and high operating margins (over 30%), unlike the stagnant and less profitable consumer business. The medical devices and pharma segments also have higher synergistic potential.

“Das Pharma Johnson & Johnson selbstverständlich, das wahrscheinlich weiterhin Johnson & Johnson heißen wird, das betrachte ich als aussichtsreiches Investment.”

The YouTuber recommends Johnson & Johnson for its exceptional safety and reliability, having increased its dividend for 63 consecutive years. Post-spin-off, the company is more focused on pharmaceuticals and medical technologies, with sustainable 4% annual sales growth and a low payout ratio, suggesting potential for faster dividend increases.

“Up next though, Johnson and Johnson, ticker J&J may only pay a 3.3% dividend, but is arguably the safest and most reliable here, having increased its dividend payout for 63 consecutive years.”

The analyst identifies Johnson & Johnson as a favorite within the healthcare sector, which is expected to post the highest earnings growth for the first quarter. The pharmaceuticals industry, in particular, is projected to have blowout earnings.

“favorites in the group include MC ticker MRK Eli Lily LL Johnson and Johnson ticker J&J and ABY ticker abbv”

The YouTuber highlights Johnson & Johnson's pristine AAA credit rating from S&P, which allows it to secure tremendously cheap financing. This financial strength, evidenced by a low average interest rate of just over 1% on its long-term debt, helps the company maintain a competitive advantage and outperform peers.

“J and J for its part though paid just 276 million dollars in interest expense last year that's an average rate at just over one percent on 27 billion dollars it owes on that long-term debt so that is tremendously cheap financing that helps it stay competitive against any other company here.”

The analyst recommends buying Johnson & Johnson shares ahead of its consumer business spin-off into Kenvu, expecting both the parent company and the spun-off entity to perform well due to re-rating and the removal of a conglomerate discount. He also believes the talc litigation impact is overstated and the company has a strong drug pipeline to avoid patent cliffs.

“I do like shares on of jnj just on that fact ahead of the spin-off... I think shares of Johnson and Johnson do well and Rise ahead of that spin-off and then both stocks can do well for up to like about a year or two after the spin-off as they get re-rated on different valuations.”

Hogue recommends buying Johnson & Johnson shares before its consumer health segment, Kenvu, spins off in mid to late 2023. He cites research showing spin-off shares often outperform the market by 23% in the first year, and parent companies also tend to do well. He believes the spin-off will unlock value by eliminating the 'conglomerate discount' and allowing the remaining medical devices and pharmaceutical segments to be re-rated higher due to their faster growth potential.

“I really like this idea this idea of buying shares of Johnson and Johnson before that spin-off.”

The YouTuber highlights Johnson & Johnson as a strong performer within the healthcare sector during past market pullbacks. Its involvement in pharmaceuticals and medical devices ensures consistent demand, making it a resilient investment during economic uncertainty.

“Johnson and Johnson was the best within this grouping that I had pulled randomly.”

The YouTuber recommends Johnson & Johnson as a long-term 'eternal stock' due to its essential pharmaceutical products and the timeless need for healthcare, especially with an aging society. The recent spin-off of its consumer health division (Kenvue) aims to streamline J&J into a more focused pharma company, potentially unlocking value. Despite a premium valuation, its status as one of the world's largest companies and the enduring demand for its products make it a strong long-term candidate.

“Die Produkte sind leider recht zeitlos. Solange wir krank werden, brauchen wir auch Pharmaprodukte und mit einer alternen Gesellschaft womöglich noch umso mehr.”